The Rebrand Challenge: UPS/ MBE Vs. FedEx/Kinko's

  |  September 30, 2004   |  Comments

A year ago, UPS acquired and rebranded Mailboxes, Etc. stores. FedEx followed suit with Kinko's. Which company rebranded successfully -- and which didn't?

Over a year ago, UPS began to rebrand its newly acquired Mailboxes, Etc. (MBE) as The UPS Store. At the time, I commented on how I felt this rebranding effort had failed. After interviewing many store owners and reporting on their customer service and branding issues, I promised to follow up in a year. Since then, Kinko's went through a rebranding of its own.

Let's compare the two and see how they fared.

For this update, I emailed many MBE and UPS store owners who had contacted me over the last year. Not a single UPS Store owner responded. These were the people who told me my predictions would be wrong, and UPS Stores would prevail over MBEs. Surprisingly, I didn't hear back from any of them this year so they could say, "I told you so." My hunch is they're keeping quiet because they were wrong.

Several MBE owners emailed. All report their stores are doing well, and (after over a year) they're still all extremely happy they didn't change their name to "The UPS Store." Many MBE owners told me they've actually gained customers who used to frequent stores now dubbed "The UPS Store."

What's behind the shift in loyalty is evidence of the branding failure. Those customers didn't know they could still rent mailboxes and conduct other nonshipping-related business at the new stores. So, they switched to the MBEs that retained the old brand.

Most MBE owners have two complaints: UPS stopped giving them any national advertising; and UPS tries to strong-arm them into regretting keeping the MBE name. Yet all the MBE owners I contacted report customer loyalty has never been higher, and their customers are actually galvanized against the UPS brand. This can't be a good thing for UPS.

In the last year, FedEx rebranded Kinko's as "FedEx Kinko's." This rebranding was a lot more successful in terms of user perception. Users know both brands and the core competencies of each. Putting the two together provides a wealth of capabilities. No questions remain in consumers' minds as to what these newly rebranded stores do. It's obvious -- much more obvious than what The UPS Store can do.

The marketing (on- and offline) of these new brands is very telling. FedEx Kinko's commercials and online ads tell you everything you can expect from the new stores. They reaffirm the consumer really does get the best of both worlds. UPS, on the other hand, chose a less effective slogan to market its new brand: "What can Brown do for you?"

I don't know what Brown can do for me. That's the problem. If I knew what it did, there'd be no need for a huge branding campaign to remind me! Not only did UPS botch MBE's rebranding, it basically reaffirmed its company-centric world view: Everyone should know what UPS can do.

Guess what? We don't. FedEx Kinko's, on the other hand, applied a customer-centric view to its rebranding and attempted to ensure customers know exactly what it can do for them. For example, does The UPS Store offer digital printing? Some MBEs did. They've seen profits plummet since they rebranded.

Kinko's Web site now directs to the new FedEx Kinko's site. MBE's Web site is still separate from the new theupsstore.com. In fact, a location search at theupsstore.com only displays UPS-branded stores. Even though the closest store to me is an MBE, I'll never find it on the UPS-branded site.

UPS is sending a clear message to its family: Conform or face the consequences. Yet MBE stores have a much more diverse set of revenue streams, while UPS Stores count on shipping for their major source of revenue. Most economists would agree diversifying these streams is a better strategy than strangling your family members out of brand egoism.

One year has proven the MBE-to-UPS transition remains a failing proposition. The new stores seem much less useful in the customer's perception. They rely mainly on UPS shipping to make ends meet. MBE stores meanwhile flourish due to increased customer loyalty, their mom-and-pop feel, and a diverse revenue stream that includes shipping, mailboxes, printing, and much more.

Kinko's didn't suffer much from its brand migration. Instead of egocentricity concerning its brand values, FedEx embraced Kinko's brand and chose a name that honors the needs of each company's customers. Customers know they should still go to their local Kinko's. It's obvious from the brand and marketing campaigns they can.

The winner of the UPS/MBE vs. FedEx/Kinko's challenge is unquestionably FedEx/Kinko's. Customers win by getting the best of both worlds. Each brand rides the other's coattails. In the UPS/MBE world, the customer is lost in brand confusion; UPS is on the receiving end of community ill-will because of how it treats MBE owners; MBE owners are cut out of national advertising; and the UPS Stores lose because no one knows what they do.

What can Brown do for me?

I still don't know, Brown.

Until next time...

Jack

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ABOUT THE AUTHOR

Jack Aaronson

Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.

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